UK wheat imports near-tripled in the first six months of the
marketing year – far outstripping exports - as users turned as far as India for
supplies to fill the void created by last year's dismal harvest.

The UK, typically a notable wheat exporter, imported 1.34m tonnes
of the grain in the July-to-December period, up from 460,500 tonnes in the
first half of 2011-12.

Imports in December itself more than tripled to 305,584
tonnes, dwarfing exports which fell to 35,130 tonnes, the worst performance for
the month in at least 20 years.

The reversal in the UK's trade fortunes reflects a 2012 harvest
which came in with the lowest yield in 20 years, and on the key quality measure
of bushel weight was the worst on records going back to 1977.

From Canada, China,
Israel…

Indeed, millers have been major drivers of the ramp up in
wheat imports, ramping up purchases of hard wheat from the likes of Canada and
Germany to ensure flour quality.

UK imports from Germany topped 107,000 tonnes in December,
more than in the whole of 2011-12.

But, with some UK wheat not fit for fodder without mixing
with higher quality supplies, feed merchants have also been forced to look at
imports, or to alternative grains, such as maize (corn).

Maize imports rose to 223,000 tonnes in December – more than
half from outside the European Union, amid talk of ready supplies being brought
in from Ukraine.

Other origins for wheat in December included the US, of
18,492 tonnes, probably of hard varieties, but with talk of softer wheat on its
way next month, to replace the dearth of UK Grade 3 wheats used in making
biscuits.

China, India and Israel also shipped small quantities of the
grain to the UK, with 1 tonne of barley turning up from Hong Kong.

'Serious
commissioning issues'

The pace of wheat imports, which is also being supported by the
restarting of the Ensus wheat ethanol plant, would appear on track to meet
expectations of a sum of about 2.5m tonnes expected by the trade over 2012-13
as a whole.

However, there are questions over the affordability of
imports, following a drop in sterling of some $0.10 against the dollar over the
last two months, and of E0.09 against the euro.

"Our old crop prices have moved much closer to French levels
over the past month," Gleadell, the UK grain merchant, said.

Furthermore, demand may also fall short of expectations if
talk is correct of teething troubles at the newly-started Vivergo ethanol plant,
which at capacity will use more than 1m tonnes of wheat a year.

"We are told that the Vivergo ethanol plant in Hull is
suffering from serious commissioning issues , and therefore the tonnage
expected to be used there is going to be much lower – if the rumours are true,"
Gleadell said.